White House Divided: Biden Rejects Steel Acquisition Despite Strong Advisory Support

On Sunday, The Washington Post reported that President Joe Biden ignored several advisors’ objections to blocking Nippon Steel’s acquisition of U.S. Steel.

The decision came after a White House meeting on January 2, convened by Chief of Staff Jeff Zients. During the meeting, National Security Advisor Jake Sullivan and several other advisors presented a conditional proposal to approve the deal. They argued that by imposing conditions, they could mitigate potential national security risks and effectively defer the issue to the next administration.

More than six advisors conveyed this position, including Sullivan, Deputy National Security Advisor Jonathan Finer, Secretary of State Antony Blinken, Deputy Secretary of State Kurt Campbell, Ambassador to Japan Rahm Emanuel, Treasury Secretary Janet Yellen, and Jared Bernstein, Chair of the White House Council of Economic Advisers. Some advisors argued that Nippon Steel’s acquisition proposal would not threaten U.S. national security. Instead, they claimed it would be the best deal for workers and stabilize U.S. Steel, which has been struggling for decades. Some also warned that blocking the deal could lead to lawsuits.

Despite this broad consensus, a smaller group of advisors, including U.S. Trade Representative Katherine Tai, Senior Advisor Steve Ricchetti, Deputy Chief of Staff Bruce Reed, Senior Advisor Mike Donilon, and Energy Secretary Jennifer Granholm, strongly opposed the acquisition. They argued that if the acquisition proceeded, the Japanese government might pressure the U.S. to reduce steel production capacity and jobs while maintaining its own. Ultimately, President Biden decided to block the sale of U.S. Steel.

Following Biden’s decision, Nippon Steel suggested it might pursue legal action, claiming the decision was illegal. Japan’s Minister of Economy, Trade, and Industry, Yoji Muto, criticized the decision as “incomprehensible.”